Correlation Between Fujian Longzhou and Guangzhou KDT
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By analyzing existing cross correlation between Fujian Longzhou Transportation and Guangzhou KDT Machinery, you can compare the effects of market volatilities on Fujian Longzhou and Guangzhou KDT and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Fujian Longzhou with a short position of Guangzhou KDT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and Guangzhou KDT.
Diversification Opportunities for Fujian Longzhou and Guangzhou KDT
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fujian and Guangzhou is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation and Guangzhou KDT Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou KDT Machinery and Fujian Longzhou is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Fujian Longzhou Transportation are associated (or correlated) with Guangzhou KDT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou KDT Machinery has no effect on the direction of Fujian Longzhou i.e., Fujian Longzhou and Guangzhou KDT go up and down completely randomly.
Pair Corralation between Fujian Longzhou and Guangzhou KDT
Assuming the 90 days trading horizon Fujian Longzhou Transportation is expected to under-perform the Guangzhou KDT. In addition to that, Fujian Longzhou is 2.28 times more volatile than Guangzhou KDT Machinery. It trades about -0.41 of its total potential returns per unit of risk. Guangzhou KDT Machinery is currently generating about -0.46 per unit of volatility. If you would invest 1,886 in Guangzhou KDT Machinery on October 12, 2024 and sell it today you would lose (265.00) from holding Guangzhou KDT Machinery or give up 14.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Longzhou Transportation vs. Guangzhou KDT Machinery
Performance |
| Timeline |
| Fujian Longzhou Tran |
| Guangzhou KDT Machinery |
Fujian Longzhou and Guangzhou KDT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Longzhou and Guangzhou KDT
The main advantage of trading using opposite Fujian Longzhou and Guangzhou KDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou position performs unexpectedly, Guangzhou KDT can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Guangzhou KDT will offset losses from the drop in Guangzhou KDT's long position.| Fujian Longzhou vs. Ingenic Semiconductor | Fujian Longzhou vs. Suzhou Oriental Semiconductor | Fujian Longzhou vs. Will Semiconductor Co | Fujian Longzhou vs. Guangdong Transtek Medical |
| Guangzhou KDT vs. Xiwang Foodstuffs Co | Guangzhou KDT vs. Jiahe Foods Industry | Guangzhou KDT vs. Xinjiang Beixin RoadBridge | Guangzhou KDT vs. Fujian Longzhou Transportation |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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